Kaohoon Morning Brief – 24 July 2023

1) FSS recommends to monitor Fed, ECB and BOJ meeting this week for further hike signals

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move within the range of 1,520-1,540 points. The analyst noted that there are important issues to monitor both domestic and international. The Fed, ECB and BOJ will meet this week as well as the release of PCE data for June. The main focus would be on the U.S. central bank’s signal for its future move if it decides to increase rates this month.


2) Oil dips on Monday as the market watch Fed’s movement for rate hikes

Oil prices edged lower on Monday as traders look ahead to the Federal Reserve meeting this week that has been speculated for another 25 basis rate hike and could possibly be more by year’s end.  

The international benchmark Brent crude fell 0.42% to $80.73 a barrel, while the West Texas Intermediate dipped 0.43% to $76.74 per barrel.

According to the data from CME FedWatch Tool, the market is fully expecting a rate hike this week and only 16% expected the Fed to raise the rate by another quarter point in September.


3) Strategist believes BOJ is wrong about inflation

Strategists from CLSA Japan believed that the Bank of Japan has been “wrong-footed” on inflation, saying that the central bank has been listening to the U.S. Fed about inflation being transitory too much. 

Nicholas Smith, a strategist from CLSA Japan, said that the bank forecast this year’s inflation to average at 1.8%, when in reality it was above 2% for 15 months now. 

Japan’s core consumer inflation rate accelerated again in June and remained above the central bank’s 2% target for the fifteenth consecutive month, according to data released on Friday, building to recent indications of expanding price pressures.

Consistent with the forecasts of the experts polled by Reuters, the core consumer inflation index increased 3.3% year-over-year in June. This was somewhat higher than the 3.2% increase seen in May.